2004-148RESOLUTION NO. 2004R- 148
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ANAHEIM
AMENDING THE DEFERRED COMPENSATION PLAN FOR PART-TIME
EMPLOYEES, AS LAST AMENDED BY RESOLUTION 2002R-163, TO
CHANGE THE DEFERRED COMPENSATION COMMITTEE COMPOSITION
AND TO CLARIFY THE BENEFICIARY PROVISION.
WHEREAS, the City Treasurer has recommended in a staff report dated June 22, 2004,
that Resolution No. 91R-173, 98R-243 and 2001R-297, as last amended by Resolution 2002R-
163, be amended to change the Deferred Compensation Committee composition and to clarify
the Beneficiary Provision effective July 1, 2004; and
WHEREAS, as a result thereof, the need exists to amend Resolution 9 IR-173 which
established the City of Anaheim Deferred Compensation Plan (hereinafter called "Plan"), for
part-time employees in compliance with Section 457 of the Internal Revenue Code; and
WHEREAS, the City Council of the City of Anaheim does find that the aforementioned
amendment is in the best interests of the City of Anaheim;
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Anaheim
that the Plan be amended and restated as summarized below. A copy of the Plan as amended is
attached as Exhibit "A".
Deferred Compensation Committee
3.09 Deferred Compensation Committee: Shall mean the Committee, consisting of the Plan
Administrator, as Chairperson; the City Manager or his appointee; the Finance Director or his
appointee; the Human Resources Director or his appointee; and two (2) Participating Employee and
one (1) Rotating Department Employee Representative
3.21 Participating Employee: An appointed member to the Deferred Compensation Committee.
The Participating Employee must submit an Application for Appointment to the Committee. The
Committee will select the Participating Employee. The Participating Employee must be a full-time
employee with the City of Anaheim and must be a Participant of the Plan. This member shall serve
a two (2) year term.
3.22 Participating Employee (Rotating Department Employee Representative): The Rotating
Department Representative will be selected from Departments in the order of staff size. Any
Department may choose to pass or not participate. The respective Department Head shall select the
Department Representative. The Department Representative must be a full-time employee with the
City of Anaheim and must be a Participant of the Plan. This member shall serve a two (2) year term.
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Beneficiary Provision
3.03 Beneficiary: Any person, trust, corporation or firm, or the estate of the Participant, or any
combination of the foregoing designated by a Participant to receive benefits under the Plan.
Designation shall be on a Provider Beneficiary Designation Form executed by the Participant to the
Provider, unless otherwise provided. Beneficiary may be singular or plural, primary or contingent.
If a valid Beneficiary form has not been filed the Provider; the account will be disbursed in the
following order upon the death of the Participant unless otherwise required by law.
The Participant's spouse
The Participant's estate
9.08 Designation of a Trust as a Beneficiary:
A Participant may name a trust as a Beneficiary with respect to the Participant's account in
accordance with the requirements of Code Section 401 (a)(9) and Treasury Regulation Section
1.401(a)(9)-4. In order for a trust to be validly named as Beneficiary under the Plan, certification of
the trust establishing the existence and terms of the trust executed by the trustee shall be provided
to the Provider, which certification shall include the following:
(10)
(1) The existence of the trust and date of execution of the trust.
(2) The identity of the settlor(s) and the currently acting trustee(s) of the trust.
(3) The powers of the trustee.
(4) The revocability or irrevocability of the trust, or a confirmation that the trust shall
become irrevocable upon the death of the Participant.
(5) The signature authority of the trustees indicating whether all of the currently acting
trustees are required to sign in order to exercise their powers.
(6) The trust identification number (taxpayer identification number).
(7) The manner in which title to trust assets should be taken.
(8) A statement that the trust has not been revoked, modified, or amended in any
manner which would cause the representations to be incorrect.
(9) A statement that the certification is being signed by all of the currently acting
trustees of the trust.
The certification shall be in the form of an acknowledged declaration signed by all
currently acting trustees of the trust under penalty of perjury.
(11) Copies of excerpts from the trust documents which designate the trustee.
(12) Copies of excerpts from the trust documents which confer upon the trustee the power to act
in the pending transaction.
To the extent any of the foregoing does not comply with the requirements of Code Section 401 (a)(9)
and the Treasury Department Regulations thereunder, the Plan shall be administered in accordance
with such provisions of the Code and Treasury Regulations.
BE IT FURTHER RESOLVED that the effective date of said amendment to Resolution
No. 91 R- 173 is July 1, 2004.
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AND BE IT FURTHER RESOLVED that, except as amended herein, Resolution No.
91R-173 shall remain in full force and effect.
THE FOREGOING RESOLUTION is approvedjsl~pd adopted b,j, kthe City Council of the
City of Anaheim this 22nd day of June 2004. /ri, (~~~)~
MAYOR-OF THE CItY oi~ ANAHEIM
ATTEST:
APPROVED AS TO FORM:
JACK L. WHITE, CITY ATTORNEY
TTORNEY
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STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss.
CITY OF ANAHEIM )
I, SHERYLL SCHROEDER, City Clerk of the City of Anaheim, do hereby certify that the foregoing
Resolution No. 2004-148 was introduced and adopted at a regular meeting provided by law, of the
Anaheim City Council held on the 22nd day of June 2004, by the following vote of the members
thereof:
AYES:
MAYOR/COUNCIL MEMBERS:
Pringle, Chavez, Hernandez, McCracken
NOES: MAYOR/COUNCIL MEMBERS: None
ABSTAINED: MAYOR/COUNCIL MEMBERS:
None
ABSENT: MAYOR/COUNCIL MEMBERS: Tait
~1~¢' CLEIS, K OF H'"E CITY OF ANAHEIM
(SEAL)
EXHIBIT "A"
Office of
CITY TREASURER
CITY OF ANAHEIM
DEFERRED COMPENSATION PLAN
FOR EMPLOYEES NOT COVERED BY CALPERS
ARTICLE I. NAME
1.01 The Employer hereby amends and restates the Employer's Deferred
Compensation Plan and Trust. The name of this plan is the City of Anaheim Deferred
Compensation Plan for Employees not Covered by CALPERS hereinafter referred to as
the "Plan". The Plan consists of the provisions set forth in this document. This
amendment and restatement of the Plan is effective July 1,2004
ARTICLE II. PURPOSE
2.01 The purpose of this Plan is to extend, to Eligible Employees of the Employer,
certain benefits which ordinarily accrue from participation in an "eligible Deferred
Compensation Plan" as that term is used in Section 457 of the Internal Revenue Code of
1986 as amended. It is intended that Participants in this Plan be considered members of
a retirement system, within the meaning of Section 3121(b)(7)(F) of the Internal Revenue
Code of 1986, as amended.
2.02 This Plan shall be an agreement solely between the Employer and participating
Employees. The Plan and Trust forming a part hereof are established and shall be
maintained for the exclusive benefit of eligible Employees and their Beneficiaries. No part
of the corpus or income of the Trust shall revert to the Employer or be used for or diverted
to purposes other than the exclusive benefit of Participants and their Beneficiaries.
2.03 The Employer does not and cannot represent or guarantee that any particular
federal and state income, payroll or other tax consequences will occur by reason of an
Employee's participation in this Plan. The Participant should consult with his own
attorney or other representative regarding all tax or other consequences of participation in
this Plan.
ARTICLE III. DEFINITIONS
For the purposes of this Plan, certain words or phrases used herein will have the following
meanings:
3.01 Account: The bookkeeping account maintained for each Participant reflecting the
cumulative amount of the Participant's Deferred Compensation, including any income,
gains, losses, or increases or decreases in market value attributable to the investment of
the Participant's Deferred Compensation, and further reflecting any distributions to the
Participant or the Participant's Beneficiary and any fees or expenses charged against
such Participant's Deferred Compensation.
3.02 Automatic Distribution Date: On or after January 1, 2002, "Automatic Distribution
Date" means April 1 of the calendar year after the Plan Year the Participant attains age
70 1/2, or, if later, has a Severance Event.
3.03 Beneficiary: Any person, trust, corporation or firm, or the estate of the
Participant, or any combination of the foregoing designated by a Participant to receive
benefits under the Plan. Designation shall be made on a City of Anaheim Participation
Agreement executed by the Participant to the Plan Administrator, unless otherwise
provided. Beneficiary may be singular or plural, primary or contingent.
If a valid Beneficiary form has not been filed the Provider; the account will be disbursed in
the following order upon the death of the Participant unless otherwise required by law.
(a) The Participant's spouse
(b) The Participant's estate
3.04 CalPERS: Shall mean the California Public Employees Retirement System.
3.05 Compensation: The salary or wages which would be paid by the Employer to or for
the benefit of an Employee (if he were not a Participant in the Plan) for actual services
performed for the Employer for the period that he is a Participant.
3.06 Contract Administrator: An administrator employed under contract authorized by
the City Council and under the direction of the Plan Administrator.
3.07 Contributions: Of a Participant shall mean his Participant Contributions and any
Employer Contributions made on his behalf.
3.08 Deferred Compensation: The portion of Compensation which the Participant and
the Employer mutually agree to defer in accordance with the provisions of this Plan; any
amount credited to the Participant's Account.
3.09 Deferred Compensation Committee: Shall mean the Committee, consisting of the
Plan Administrator, as Chairperson; the City Manager or his appointee; the Finance
Director or his appointee; the Human Resources Director or his appointee; and two (2)
Participating Employee and one (1) Rotating Department Employee Representative
3.10 Disability: The substantial permanent inability of a Participant to engage in his
usual occupation by reason of a medically determinable physical or mental impairment as
determined by the Employer or by the Public Employees' Retirement System, on the
basis of advice from a physician or physicians.
3.11 Eligible Employee: Shall mean any Employee who is not a Qualified CALPERS
Participant. However, if an Employee's Compensation is determined pursuant to a
collective bargaining agreement, he shall not be an Eligible Employee under this Plan
unless he meets the preceding requirements of this Paragraph 3.11 and such bargaining
agreement specifically provides that he may be an Eligible Employee hereunder; and
further provided no employee shall be an Eligible employee if his service is described in
clauses (1) through (v) of the IRC Section 3121 (b)(7)(F).
3.12 Employee: Any individual who provides services for the Employer, whether as an
employee or officer of the Employer and who has been designated by the Employer as
eligible to participate in the Plan.
3.13 Employer: Shall mean the City of Anaheim
3.14 Employer Contributions: Shall mean the contributions of the Employer that are
made to the Plan in accordance with Article 5.02.
3.15 Includible Compensation: The amount of an Employee's compensation from the
Employer for a taxable year that is considered compensation within the meaning of
Section 415(c)(3) of the Code.
3.16 IRC: Shall mean the Internal Revenue Code of 1986, as amended, and any
Treasury Regulations and ruling thereunder.
3.17 Normal Compensation: The amount of compensation which would be payable to a
Participant by the Employer for a taxable year if no Participation Agreement were in effect
to defer compensation under this Plan.
3.18 Normal Retirement Age: Normal Retirement age is designated as 70-1/2 unless
the Participant has elected an alternate Normal Retirement Age in writing (to be provided
to the Plan Administrator before severance). Once a Participant elects to use the normal
catch-up provision, the normal retirement age may not be changed.
A Participant's alternate Normal Retirement Age may not be earlier than the earliest date
that the Participant will become eligible to retire and receive unreduced retirement
benefits under the California Public Employees Retirement System, and may not be later
than the date the Participant will attain age 70-1/2. If a Participant continues employment
after attaining age 70-1/2, but has not previously elected an alternate Normal Retirement
Age, the Participant's alternate Normal Retirement Age can not be later than the
mandatory retirement age established by the Employer, or the age at which the
Participant actually leaves service if the employer has no mandatory retirement age. If
the Participant will not become eligible to received benefits under a basic retirement plan
maintained by the employer, the Participant's alternate Normal Retirement Age may not
be earlier than age 55 and may not be later than age 70-1/2.
3.19 Participant: Shall mean any Eligible Employee or former Eligible Employee who
has made Participant Contributions pursuant to the Plan and has an Account under the
Plan.
3.20 Participant Contributions: Shall mean that portion of a Participant's Compensation
that is deducted by the Employer from such Compensation in accordance with Article
5.01.
3.21 Participating Employee: An appointed member to the Deferred Compensation
Committee. The Participating Employee must submit an Application for Appointment to
the Committee. The Committee will select the Participating Employee.
Employee must be a full-time employee with the City of Anaheim
Participant of the Plan. This member shall serve a two (2) year term.
The Participating
and must be a
3.22 Participating Employee (Rotating Department Employee Representative): The
Rotating Department Representative will be selected from Departments in the order of
staff size. Any Department may choose to pass or not participate. The respective
Department Head shall select the Department Representative. The Department
Representative must be a full-time employee with the City of Anaheim and must be a
Participant of the Plan. This member shall serve a two (2) year term.
3.23 Participation Agreement: An agreement entered into between an Employee and
the Employer, including any amendments or modifications, thereof. Such agreement
shall: (a) fix the amount of Deferred Compensation; (b) specify a preference among the
Providers designated by the Employer; (c) designate the Employee's Beneficiary or
Beneficiaries; and (d) incorporate the terms, conditions, and provisions of the Plan by
reference.
3.24 Plan Administrator: The City Treasurer unless another person or entity is
designated by the City Council.
3.25 Plan Year: The calendar year.
3.26 Provider: An institution providing investments or deposit vehicles.
3.27 Qualified CALPERS Participant: Shall mean any Employee who:
(i) is or ever has been a member of CALPERS, and
(ii) either:
(A)
based upon his current compensation, is making Employee
contributions to CALPERS and having Employer contributions
made to CALPERS,
(B)
previously retired from the service of the Employer and has
attained normal retirement age under the CALPERS, or
(c)
previously retired from the service of the Employer and is
currently receiving retirement benefits under the CALPERS.
3.28 Required Beginning Date: April 1 of the calendar year following the calendar year
in which the Participant attains age 70-1/2 or a Severance Event, whichever is later.
3.29 Retirement: The first date upon which both of the following shall have occurred
with respect to a Participant: Severance Event and attainment of age 50.
3.30 Severance Event: Severance of the Participant's employment with the Employer
within the meaning of Section 457(d)(2)(A)(ii) of the Code. In general, a Participant shall
be deemed to have severed his employment with the Employer for purposes of this Plan
when, in accordance with the established practices of the Employer, but not earlier than
such time as the person is no longer on the payroll of the.
3.31 Sub-committee: A subdivision of the Committee and shall be less than a quorum
of the Committee.
3.32 Trust: The Trust created under Article VII of the Plan which shall consist of all
compensation deferred under the Plan, plus any income and gains thereon, less any
losses, expenses and distributions to Participants and Beneficiaries.
3.33 Trustee: The Deferred Compensation Committee Members shall act as Trustees.
ARTICLE IV. ADMINISTRATION
4.01 The plan shall be administered by the Plan Administrator but may be administered
through a Contract Administrator under the direction of the Plan Administrator.
Participants receiving services from said Plan Administrator and/or Contract Administrator
may be charged a fee for said services.
The Trustees shall determine said fees in a manner deemed fair and equitable. The
Trustees may have withheld or collect, such fee, in such manner as it deems equitable,
from the compensation deferred pursuant to the Plan, or the income produced from the
compensation deferred pursuant to the Plan.
4.02 Duties of the Plan Administrator: The Plan Administrator shall have the authority to
make all discretionary decisions affecting the rights or benefits of Participants which may
be required in the administration of this Plan. The Plan Administrator's decisions shall be
afforded the maximum deference permitted by applicable law.
4.03 Duties of the Provider: The Provider shall act for the exclusive benefit of the
Participants and their Beneficiaries. The Provider, as agent for the Trust, shall perform
nondiscretionary administrative functions in connection with the Plan, including but not
limited to: the maintenance of Participants' Accounts, the provision of periodic reports of
the status of each Account, and the disbursement of benefits on behalf of the Trust in
accordance with the provisions of this Plan.
ARTICLE V. PARTICIPATION IN THE PLAN
5.01 Each Eligible Employee shall have up to 7.5% of his Compensation earned as an
Eligible Employee withheld by the Employer as a Padicipant Contribution under this Plan.
Notwithstanding the preceding, the Employer and the Eligible Employee mutually
acknowledge that unless indicated otherwise in the salary resolution or personnel
ordinance or policies of the Employer, the salary or wage of the Eligible Employee
includes the Participant Contributions made under this Plan. As soon as practicable after
the deduction from the Compensation of the Eligible Employee, the Employer shall pay all
Participant Contributions to the fund or funds established under the Plan.
5.02 On behalf of each Eligible Employee that has Participant Contributions deducted
from his Compensation pursuant to Article 5.01, the Employer shall pay to the fund or
funds established under the Plan, any Employer Contribution required under the terms of
any collective bargaining agreement or City Council Resolution. Payment of Employer
Contributions shall be made concurrently with the payment of the Participant
Contributions.
5.03 The Employer may change percentages of Compensation to be contributed as
Participant Contributions or Employer Contributions to greater or lesser percentages by
amending this Plan in accordance with Article XV. In addition, such percentages may be
changed to comply with the terms of any collective bargaining agreement pursuant to
which Employees participate in this Plan. Any percentage changes in the amount of
Participant Contributions hereunder shall be effective only with respect to Compensation
earned after the adoption date of the Plan amendment relating thereto or, if applicable
and later, the ratification date of the collective bargaining agreement relating thereto. In
no event shall the combined Participant Contributions and Employer Contributions total
less than 7.5% of an Eligible Employee's Compensation earned or exceed the maximum
deferral allowed by the Internal Revenue Code.
ARTICLE VI. NON-RESPONSIBILITY CLAUSE
6.01 The Employer may, but is not required to, invest funds held pursuant to
agreements between Participants and the Employer in accordance with the preference or
preferences indicated by each Participant at the time of enrollment or change in
enrollment, prospectively only. The Employer shall retain the right to approve or
disapprove such investment request or requests, for transfer of investment among
different modes of investment available under the Plan. Any such action by the Employer
in investing funds, or approving of any investment of funds, shall not be considered to be
either an endorsement or guarantee of any investment, nor shall it be considered to attest
to the financial soundness or the suitability of any investment for the purpose of meeting
future obligations.
In no event shall the Employer's obligation to pay benefits to a Participant exceed the
value of the amounts credited to the Participant's account; the Employer shall not be
liable for losses arising from depreciation or shrinkage, in the value of any investments
acquired under this Plan.
ARTICLE VII. TRUST AND INVESTMENT OF ACCOUNTS
7.01 Investment Funds: In accordance with uniform and nondiscriminatory rules
established by the Employer and the Provider, the Participant may direct his Accounts to
be invested in one (1) or more investment funds available under the Plan; provided,
however, that the Participant's investment directions shall not violate any investment
restrictions established by the Employer. Neither the Employer, the Provider, nor any
other person shall be liable for any losses incurred by virtue of following such directions or
with any reasonable administrative delay in implementing such directions. Participants
must notify the City of errors in the Participants statement within 60 days after the end of
the quarter in which the error occurred.
7.02 Crediting of Accounts: The Participant's Account shall reflect the amount and value
of the investments or other property obtained by the Employer through the investment of
the Participant's Deferred Compensation. Each Participant shall receive periodic reports
from the Providers, not less frequently than annually, showing the then current value of
his Account. Investment and market valuation of mutual funds can be made only when
the New York Stock Exchange is open for trading.
7.03 Trust: Notwithstanding any contrary provision of the Plan, in accordance with
Section 457(g) of the Internal Revenue Code, all amounts of compensation deferred
pursuant to the Plan, all property and rights purchased with such amounts, and all income
attributable to such amounts, property, or rights shall be held in Trust for the exclusive
benefit of participants and beneficiaries under the Plan. Any Trust under the Plan shall
be established pursuant to a written agreement that constitutes a valid Trust under the
law of the State of California.
All amounts of compensation deferred under the Plan shall be transferred to a Trust
established under the Plan within a period that is not longer than is reasonable for the
proper administration of the accounts of participants. Attached hereto as Exhibit A, an
incorporated herein by reference is the City of Anaheim Section 457 Deferred
Compensation Plan Trust.
ARTICLE VIII. ELIGIBLE ROLLOVERS
8.01 Eligible Rollover Distributions:
(a) Effective Date: This Article 8.01 is effective January 1,2002.
(b) Outgoing Rollovers: Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this Article, a distributee may
elect, at the time and in the manner prescribed by the Plan Administrator, to have
any portion of an eligible rollover distribution paid directly to an eligible retirement
plan specified by the distributee in a direct rollover.
(c) Definitions:
(1)
Eligible Rollover Distribution: An eligible rollover distribution is any distribution of
all or any portion of the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or the joint lives
(or joint life expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any distribution to the
extent such distribution is required under Sections 401 (a)(9) and 457(d)(2) of the
Code; and any distribution made as a result of an unforeseeable emergency of
the employee. For purposes of distributions from other eligible retirement plans
rolled over into this Plan, the term eligible rollover distribution shall not include
the portion of any distribution that is not includible in gross income (determined
(2)
(3)
(4)
without regard to the exclusion for net unrealized appreciation with respect to
employer securities).
Eligible Retirement Plan: An eligible retirement plan is an individual retirement
account described in Section 408(a) of the Code, an individual retirement annuity
described in Section 408(b) of the Code, an annuity plan described in Sections
403(a) or 403(b) of the Code, a qualified Trust described in Section 401(a) of the
Code, or an eligible deferred compensation plan described in Section 457(b) of
the Code which is maintained by an eligible governmental employer described in
Section 457(e)(1)(A) of the Code, provided that for outgoing rollovers it accepts
the distributee's eligible rollover distribution.
Distributee: For purposes of outgoing rollovers, a distributee includes an
employee or former employee. In addition, the employee's or former employee's
surviving spouse and the employee's or former employee's spouse or former
spouse who is the alternate payee under a qualified domestic relations order, as
defined in Section 414(p) of the Code, are distributees with regard to the interest
of the spouse or former spouse.
Direct Rollover: A direct rollover is a payment by the plan to the eligible
retirement plan specified by the distributee.
ARTICLE IX. DISTRIBUTION OF BENEFITS
9.01 Retirement Benefits and Elections on Severance Event:
(a) General Rule: Except as otherwise provided in this Article IX, the distribution of a
Participant's Account shall commence as of a Participant's Automatic Distribution
Date, and the distribution of such benefits shall be made in accordance with one of
the payment options described in Article 9.02. Notwithstanding the foregoing, but
subject to the following paragraphs of this Article 9.01, the Participant may elect
following a Severance Event to have the distribution of benefits commence on a
fixed determinable date other than that described in the preceding sentence, but not
later than April I of the year following the year of the Participant's Retirement or
attainment of age 70-1/2, whichever is later. Prior to January 1, 2002, an election
made pursuant to the preceding sentence shall not be valid unless such election is
made not less than 30 days prior to the date that the distribution of a Participant's
Account would otherwise commence.
(b)
Additional Delay in Distribution: The Participant may elect to defer the
commencement of distribution of benefits to a fixed determinable date later than
the date provided in Article 9.01(a), but not later than April 1 of the year following
the year of the Participant's retirement or attainment of age 70-1/2, whichever is
later, provided, however, that in the case of elections made prior to January 1,
2002, (a) such election is made after the 61st day following the Participant's
Severance Event and before commencement of distributions, (b) the Participant
may only make only one (1) such election, and (c) such election is made not less
than 30 days prior to the date the distribution of a Participant's Account would
otherwise commence. Notwithstanding the foregoing, the Plan Administrator, in
order to ensure the orderly administration of this provision, may establish a
deadline after which such election to defer the commencement of distribution of
benefits shall not be allowed.
9.02 Payment Options: As provided in Articles 9.01, 9.05, 9.06 and 9.07, a Participant
or Beneficiary may elect to have the value of the Participant's Account distributed in
accordance with one of the following payment options, provided that such option is
consistent with the limitations set forth in Article 9.04:
(a) Equal monthly, quarterly, semi-annual or annual payments in an amount chosen by
the Participant, continuing until his Account is exhausted;
(b) One lump-sum payment;
(c) Approximately equal monthly, quarterly, semi-annual or annual payments, calculated
to continue for a certain period chosen by the Participant.
(d) Annual Payments equal to the minimum distributions required under Section 401(a)(9)
of the Code, including the incidental death benefit requirements of Section
401 (a)(9)(G), over the life expectancy of the Participant or over the life expectancies of
the Participant and his or her Beneficiary.
(e) Payments equal to payments made by the issuer of a retirement annuity policy
acquired by the Provider.
(f) Any payment option elected by the Participant and agreed to by the Employer and
Provider and as provided for by the Internal Revenue Service.
A Participant's or Beneficiary's selection of a payment option may include the selection of
an automatic annual cost-of-living increase. Such increase will be based on the rise in the
Consumer Price Index for All Urban Consumers (CPI-U) from the third quarter of the last
year in which a cost-of-living increase was provided to the third quarter of the current
year. Any increase will be made in periodic payment checks beginning the following
January.
9.03 Default:
(a) Participant's or Beneficiary's election of a payment option must be made at least 30
days before the payment of benefits is to commence.
If, prior to January 1, 2002, a Participant or Beneficiary made a timely election of a
payment date but failed to specify a payment option or failed to make a timely
election of both payment date and option, and as a result, either was defaulted to
benefit commencement at age 65, or such other date as the Participant or
Beneficiary may have specified, benefits shall be paid annually in the amount of
$100 per year commencing at age 65 or the date specified by the Participant or
Beneficiary until the Participant or Beneficiary reaches age 70-1/2. When the
Participant or Beneficiary reaches age 70-1/2, payments shall be made in
accordance with Code Section 401(a)(9) and the regulations thereunder.
9.04 Limitation on Options: No payment option may be selected by a Participant
under subsections 9.02 (a) or (c) unless the amount of any installment is not less than
$100 per year. No payment option may be selected by a Participant under Sections
9.02, 9.06, or 9.07 unless it satisfies the requirements of Sections 401(a)(9) and
457(d)(2) of the Code, including that payments commencing before the death of the
Participant shall satisfy the incidental death benefit requirements under Section
401(a)(9)(G).
9.05 Minimum Distribution: Starting the year a Participant who has a Severance Event
reaches age 70-1/2 he is required to withdraw a minimum amount annually from his
account. If the Participant works past age 70-1/2, he is required to begin withdrawals for
the year in which he actually has a Severance Event.
For purposes of this Section, the Internal Revenue Code Regulations shall apply when
determining the minimum distribution.
9.06 Post-Retirement Death Benefits:
(a) Should the Participant die after he has begun to receive benefits under a payment
option, the remaining payments, if any, under the payment option shall be payable to
the Participant's Beneficiary within the 30-day period beginning with the 61st day after
the Participant's death, unless the Beneficiary elects payment under a different
payment option that is available under Article 9.02 within 60 days of the Participant's
death. Any different payment option elected by a Beneficiary under this section must
provide for payments at a rate that is at least as rapid under the payment option that
was applicable to the Participant. In no event shall the Employer or Provider be liable
to the Beneficiary for the amount of any payment made in the name of the Participant
before the Employer or Provider receives proof of death of the Participant.
(b) If the designated Beneficiary does not continue to live for the remaining period of
payments under the payment option, then the commuted value of any remaining
payments under the payment option shall be paid in a lump sum to the
Beneficiary(ies) of the Beneficiary. In the event that the Beneficiary has no named
Beneficiary(ies) on file, payment shall be made in a lump sum to the estate of the
Beneficiary.
(c) If the beneficiary is a spouse, the Beneficiary may rollover distributions to an IRA or a
401,403(b) or governmental 457 plan in which the spouse participates.
In the event that the Participant's estate is the Beneficiary, the commuted value of any
remaining payments under the payment option shall be paid to the Participant's estate in
a lump sum.
9.07 Pre-Retirement Death Benefits:
(a) Should the Participant die before he has begun to receive the benefits provided by
Article 9.01, the value of the Participant's Account shall be payable to the Beneficiary
commencing within the 30-day period beginning on the 91st day after the Participant's
death, unless the Beneficiary elects a different fixed or determinable benefit
commencement date within 90 days of the Participant's death. Such benefit
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commencement date shall be not later than the later of (i) December 31 of the year
following the year of the Participant's death, or (ii) if the Beneficiary is the Participant's
spouse, December 31 of the year in which the Participant would have attained age 70-
1/2.
(b)
Unless a Beneficiary elects a different payment option prior to the benefit
commencement date, death benefits under this Section shall be paid in approximately
equal annual installments over five years, or over such shorter period as may be
necessary to assure that the amount of any annual installment is not less than $1,200.
A Beneficiary shall be treated as if he were a Participant for purposes of determining
the payment options available under Article 9.02, provided, however, that the payment
option chosen by the Beneficiary must provide for payments to the Beneficiary over a
period no longer than the life expectancy of the Beneficiary, and provided that such
period may not exceed (15) years if the Beneficiary is not the Participant's spouse.
(c)
In the event that the Beneficiary dies before the payment of death benefits has
commenced or been completed, the remaining value of the Participant's Account shall
be paid in a lump sum to the Beneficiary(ies) of the Beneficiary. In the event that the
Beneficiary has no named Beneficiary(ies) on file, payment shall be made in a lump
sum to the estate of the Beneficiary.
(d) If the beneficiary is a spouse, the Beneficiary may rollover distributions to an IRA or a
401,403(b) or governmental 457 plan in which the spouse participates.
In the event that the Participant's estate is the Beneficiary, payment shall be made to the
Participant's estate in a lump sum.
9.08 Designation of a Trust as a Beneficiary:
A Participant may name a Trust as a Beneficiary with respect to the Participant's account
in accordance with the requirements of Code Section 401(a)(9) and Treasury Regulation
Section 1.401(a)(9)-4. In order for a Trust to be validly named as Beneficiary under the
Plan, certification of the Trust establishing the existence and terms of the Trust executed
by the Trustee shall be provided to the Provider, which certification shall include the
following:
(10)
(1) The existence of the trust and date of execution of the trust.
(2) The identity of the settlor(s) and the currently acting trustee(s) of the trust.
(3) The powers of the trustee.
(4) The revocability or irrevocability of the trust, or a confirmation that the trust shall
become irrevocable upon the death of the Participant.
(5) The signature authority of the trustees indicating whether all of the currently acting
trustees are required to sign in order to exercise their powers.
(6) The trust identification number (taxpayer identification number).
(7) The manner in which title to trust assets should be taken.
(8) A statement that the trust has not been revoked, modified, or amended in any
manner which would cause the representations to be incorrect.
(9) A statement that the certification is being signed by all of the currently acting
trustees of the trust.
The certification shall be in the form of an acknowledged declaration signed by all
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currently acting trustees of the trust under penalty of perjury.
(11) Copies of excerpts from the trust documents which designate the trustee.
(12) Copies of excerpts from the trust documents which confer upon the trustee the
power to act in the pending transaction.
To the extent any of the foregoing does not comply with the requirements of Code
Section 401(a)(9) and the Treasury Department Regulations thereunder, the Plan shall be
administered in accordance with such provisions of the Code and Treasury Regulations.
9.09 Unforeseeable Emergency Withdrawals: This Plan does not permit Unforeseeable
Emergency Withdrawals.
9.10 Transitional Rule for Pre-1989 Benefit Elections: In the event that, prior to January
1, 1989, a Participant or Beneficiary has commenced receiving benefits under a payment
option then that payment shall remain in effect unless a change is allowed by the Internal
Revenue Service.
9.11 Inactive Accounts (De Minimis): Voluntary In-Service Distribution: A Participant
who is an active Employee of the Employer may elect to receive a lump sum distribution
of the total amount credited to his Accounts under the Plan if all of the following
requirements are met:
(i)
The total amount credited to the Participant's Accounts under the Plan,
exclusive of any Rollover Contribution Accounts, does not exceed $5,000
or such higher amount as may be provided under Section 411 (a)(11 )(A) of
the Code.
(ii) The Participant has not previously received a distribution under this
Section.
The Participant has not deferred Compensation under the Plan during the
two-year period ending on the date of the distribution under this Section.
9.12 Other Distributions: Notwithstanding any other provisions of the Plan, the
Employer may change the time or methods of benefit payment pursuant this Plan.
If the balance due the Participant or Beneficiary is less than $5,000 (or as may be
revised by the Internal Revenue Service and/or the Department of Labor), the Employer
shall discharge its obligation by a lump sum payment.
9.13 Forfeiture: The Plan Administrator is authorized to declare a forfeiture to the
Plan of all Plan distributions and any income or other increment thereon if the owner,
participant or beneficiary cannot be found and has not, within three years after it
becomes payable or distributable, accepted the distribution, corresponded in writing
concerning the distribution, or otherwise indicated an interest as evidenced by a
memorandum or other written record on file with the Plan Administrator. All forfeitures
shall be used to offset future Plan expenses.
ARTICLE X. NON-ASSIGNABILITY
10.01 In General: Except as provided in Article 10.02, no Participant or Beneficiary shall
have any right to commute, sell, assign, pledge, transfer or otherwise convey or
encumber the right to receive any payments hereunder, which payments and rights are
expressly declared to be non-assignable and non-transferable.
10.02 Domestic Relations Orders:
(a) Allowance of Transfers: To the extent required under final judgment, decree, or order
(including approval of a property settlement agreement) that (i) relates to the
provision of child support, alimony payments, or marital property rights and (ii) is
made pursuant to a state domestic relations law, any portion of a Participant's
Account may be paid or set aside for payment to a spouse, former spouse, child, or
other dependent of the Participant.
Where necessary to carry out the terms of such an order, a separate Account shall be
established with respect to the spouse, former spouse, or child who shall be entitled to
make investment selections with respect thereto in the same manner as the
Participant; any amount so set aside for a spouse, former spouse, or child shall be
paid out in a lump at the earliest date that benefits may be paid to the Participant,
unless the order directs a different time or form of payment. To the extent provided
in Article VIII, the alternate payee may elect to transfer all or part of a distribution to an
eligible retirement plan. In addition, in accordance with Code Section 414(p)(10),
this Plan shall consider an order a qualified domestic relations order even if such
order requires a distribution to an alternate payee prior to the time that a Participant
has a Severance Event. Any Payment made to a person other than the Participant
pursuant to this Article shall be reduced by any required income tax withholding and
shall be taxable to the alternate payee.
(b) Release from Liability to Participant: The Employer's liability to pay benefits to a
Participant shall be reduced to the extent that amounts have been paid or set aside
for payment to a spouse, former spouse, or child pursuant to paragraph (a) of the
Article. No such transfer shall be effectuated unless the Employer has been provided
with satisfactory evidence that the Employer is released from any further claim by the
Participant with respect to such amounts. The Participant shall be deemed to have
released the Employer from any claim with respect to such amounts, in any case in
which (i) the Employer has been served with legal process or otherwise joined in a
proceeding relating to such transfer, (ii) the Participant has been notified of the
pendency of such proceeding in the manner prescribed by the law of the jurisdiction in
which the proceeding is pending for service of process in such action or by mail from
the Employer to the Participant's last known mailing address, and (iii) the Participant
fails to obtain an order of the court in the proceeding relieving the Employer from the
obligation to comply with the judgment, decree, or order.
(c) Participation in Legal Proceedings: The Employer shall not be obligated to defend
against or set aside any judgment, decree, or order described in paragraph (a) or any
legal order relating to the garnishment of a Participant's benefits, unless the full
expense of such legal action is borne by the Participant. In the event that the
Participant's action (or inaction) nonetheless causes the Employer to incur such
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expense, the amount of the expense may be charged against the Participant's
Account and thereby reduce the Employer's obligation to pay benefits to the
Participant. In the course of any proceeding relating to divorce, separation, or child
support, the Employer shall be authorized to disclose information relating to the
Participant's Account to the Participant's spouse, former spouse, or child (including
the legal representatives of the spouse, former spouse, or child), or to a court.
ARTICLE Xl. RELATIONSHIP TO OTHER PLANS AND EMPLOYMENT AGREEMENTS
11.01 This Plan serves in addition to any other retirement, pension, or benefit plan or
system presently in existence or hereinafter established for the benefit of the Employer's
employees. Nothing contained in this Plan shall be deemed to constitute an employment
contract or agreement between any Participant and the Employer or to give any
Participant the right to be retained in the employ of the Employer. Nor shall anything
herein be construed to modify the terms of any employment contract or agreement
between a Participant and the Employer.
ARTICLE XlI. APPLICABLE LAW
12.01 This Plan and Trust shall be construed under the laws of the State of California
and is established with the intent that it meets the requirements of an "eligible deferred
compensation plan" under Section 457 of the Code, as amended. The provisions of this
Plan and Trust shall be interpreted and applied so as to conform with the requirements of
Section 457 of the Code.
ARTICLE XlII. GENDER AND NUMBER
13.01 The masculine pronoun, whenever used herein, shall include the feminine
pronoun, and the singular shall include the plural, except where the context requires
otherwise.
ARTICLE XlV. MISCELLANEOUS
14.01 The Deferred Compensation Committee, as defined in Article 3.06 is empowered to
review, evaluate, and make recommendations for product providers to the City Council.
Additionally, the Deferred Compensation Committee will serve as an advisor to the Plan
Administrator in decisions such as unforeseeable emergency limitations, etc. Specific
duties and responsibilities for overall deferred compensation plan administration are
noted below;
A. CITY COUNCIL
Authorize, by Resolution, the Anaheim Deferred
Compensation Plan Document, in compliance with Section
457 of the Code.
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Approves additions or removal of Providers, as well as
approve major amendments to approved Plans.
3. Authorize the administration of the Plan.
B. PLAN ADMINISTRATOR
Day to day administration, including approval of Plan
Participation Agreements and preliminary evaluation of
unforeseeable emergencies.
Authority to sign all legal agreements with approved
Providers, including minor Plan amendments.
Provide recommendations on adding or deleting
Providers, to the City Council.
Communicating the Deferred Compensation Program to
employee.
o
Maintain Deferred Compensation Procedures Manual and
related Plan documents.
6. Coordinate Provider/City employee meeting schedule.
The Plan Administrator shall have the right to delegate any of the
above duties to staff.
C. DEFERRED COMPENSATION COMMITTEE
Conduct reviews of the Deferred Compensation Program and make
recommendations as necessary.
Conduct reviews of the Retirement Health Savings Program and
make recommendations as necessary.
Review Provider performance and assist the Plan Administrator in
developing recommendations on adding, deleting or amending
Providers to the City Council.
Review and make determinations on adding, deleting or amending
Investment Options.
Assist the Plan Administrator on unforeseeable emergency
determinations, as necessary.
6. The Committee shall have the power to appoint subcommittees.
The seven (7) Deferred Compensation Committee Members shall
serve as Trustees of the Trust.
o
The Committee will select the two (2) Participating Employee
members of the Committee.
D. SUBCOMMITTEE
1. Performs task within the scope of the Committee's responsibility
The Subcommittee makes reports and recommendations for
consideration to the Committee.
14.02 No Participant or other person shall have any legal or equitable right against the
Employer except as provided in the Plan, and in no event shall the terms of employment
of any Employee or Participant be modified or in any way affected thereby.
14.03 Each Participant herein expressly agrees for himself, his successors, assignees
and his beneficiaries that he shall look solely to the general assets of the Trust for the
payment of any such benefit to which he may become entitled under the Plan.
14.04 The Plan has been adopted in the State of California and shall be construed and
governed and administered in compliance with all applicable State law.
14.05 The Plan shall be binding upon and shall inure to the benefit of the Employer, its
successors and assigns, all Participants and Beneficiaries, and their heirs, and legal
representatives.
14.06 Any notice or other communication required or permitted under the Plan shall be in
writing, and if directed to the Employer shall be sent to the Employer or Contract
Administrator at its principal office, as applicable; and, if directed to a Participant or a
Beneficiary, shall be sent to such Participant or Beneficiary at his last-known address as it
appears on the Employer's and Provider's records. Such notice shall be deemed given
when mailed.
14.07 Deductions for Participant's contributions to the Public Employees' Retirement
System, Social Security, Retirement Health Savings Program, and other retirement plan
or associations shall be made regardless of amounts deferred pursuant to the Plan.
14.08 A permitted leave of absence without pay shall be considered to be a temporary
suspension of contribution to the Plan. Contribution shall be automatically reinstated in
accordance with the Participation Agreement as of the first day of the next pay period
subsequent to the termination of such leave of absence status. In the event of a non-
permitted leave of absence without pay, the Employer at its discretion may deem such
absence a revocation of the Participation Agreement.
14.09 There shall be no loans or advances to the Participant or Beneficiary based upon
book accounts, described herein, or upon any other obligations under the Plan.
:]_6
ARTICLE XV. AMENDMENT OR TERMINATION OF PLAN
15.01 The Employer has the sole and exclusive right to terminate this Plan for all
Participants at any time. Upon such termination, each Participant in the Plan will be
deemed to have revoked his Participation Agreement as of the date of such termination.
Such termination shall have no effect on the rights of the Participant with respect to
amounts already deferred under the Plan or transferred pursuant to Article VIII.
The Employer may also amend the provisions of this Plan at any time; provided, however,
that no amendment shall affect the rights of the Participants or their Beneficiaries to the
receipt of payment of benefits, to the extent of any Compensation deferred at the time of
the amendment as adjusted for income or losses attributable to such Deferred
Compensation prior to and subsequent to the amendment.
To the extent that there are legislative changes affecting Section 457 of the Internal
Revenue Service Code, this plan shall be interpreted to allow implementation of
mandatory changes.
This Plan is intended to qualify as an eligible deferred compensation plan under Section
457 of the Code and shall be interpreted and administered in a manner consistent with
such qualifications. The Employer reserves the right to amend the Plan to the extent that
may be necessary to conform the Plan to the requirements of Section 457 of the Code
and any other applicable law, regulation or ruling, including amendments that are
retroactive to the effective date of the Plan. In the event that the Plan is deemed by the
Internal Revenue Service to be administered in a manner inconsistent with Section 457 of
the Code, the Employer shall correct such inconsistency within the period provided in
Section 457 of the Code, or terminate the Plan. The Employer reserves the right to take
such action and do such things as are required to make the Plan, as administered,
consistent with Section 457 of the Code.
ARTICLE XVl. TOTAL AGREEMENT
16.01 This Plan and the Participation Agreement, and any subsequently adopted
amendment thereof, shall constitute the total agreement or contract between the
Employer and the Participant regarding the Plan. No oral statement regarding the Plan
may be relied upon by the Participant.
The Employer hereby establishes this Deferred Compensation Plan on the terms and
conditions set forth herein.
MAYOR
CITY TREASURER
ATTEST:
c,~
APPROVED AS TO FORM
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